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President of Russia Vladimir Putin: Mr Podguzov, your company, a structured corporation, is not only of economic, but also of social significance.

I know that it has been developing quite successfully. I would like to hear your assessments and plans.

Director General of Russian Post Nikolai Podguzov: Mr President,

Indeed, we achieved some success in 2018. We focused on optimising the business processes and on systematically cutting costs. This work has already produced results.

At the end of 2018, the company's revenue and net profit reached a historical high of 190 billion rubles in revenue and 2.7 billion rubles in net profit.

Having shown such results and having made projections for the future, we started on our second most important job – raising the wages of our core workers.

We have developed a programme that will affect 210,000 employees such as postal service operators, and mail carriers – we plan to increase their pay by 20 percent and we have invested 11.5 billion rubles in the payroll fund.

On May 1, we will launch the programme in 17 regions with the lowest pay and over 18 months, we will bring the core workers’ wages up to market levels. If the Russian Post’s performance exceeds forecasts, then we will try to do it in a shorter time.

The infrastructure of Russian Post needs to be renewed and investments are required. A modern infrastructure will contribute to high-quality postal services and good working conditions, which is very important.

Last year we carried out repair work on about 3,000 post offices and plan to proceed at the same rate.

In addition, this January we launched the second line of the Vnukovo 2 logistic postal centre, which will make it possible for us to achieve the highest market rates of delivery quality in Moscow Region.

At the same time, last autumn together with VTB Bank we established National Logistic Technologies, a company that is to create a network of 38 logistic postal centres in two years using the most advanced technologies.

These centres are established in order to create a digital logistic platform that will support e-commerce flow in the domestic market, as well as imports, exports and transit flows.

Investments in Russian Post will account for about 34 billion rubles over a period of the next two years.

Russian Post’s social function is another important task we have to address. We deliver pensions and social security benefits to 18 million people. Most of them live in rural areas.

Our mission is to preserve Russian Post’s infrastructure across the country, especially in remote areas, to provide basic postal services, to deliver food and to provide financial services.

In this context, I would like to note the development of our Pochta Bank project. Last year, the number of offices of the bank in the Russian Post’s infrastructure reached 15,000, so we will continue to expand our financial services.

In order to develop the post’s social function, we have launched the Bringing Care Closer project together with the Agency for Strategic Initiatives. Thank you very much for approving it at the Agency’s Supervisory Council in January.

The project in Novgorod Region will aim to find out, using the postal workers, what the requirements are for social and medical services.

I would like to say a bit about our active participation in preparations to celebrate a great day in our nation, the 75^th anniversary of the Victory in the Great Patriotic War. Russian Post will take part in many events, such as the Immortal Regiment, Letters of Victory and Faces of Victory. We will use our entire infrastructure for this purpose.

This year, Pochta Bank is to be converted into a joint stock company. You signed the relevant law on June 29, 2018. Together with the Russian Government, we are now carrying out the reorganisation. According to the law, no later than October 1, 2019, Pochta Bank will become a joint-stock company with the Russian Government owning 100% of the company’s shares.

Vladimir Putin: Pochta Bank’s results show that the decisions made concerning restructuring and reorganising the work according to new principles are now manifesting themselves.

What do you believe to be the most important factor that contributed to achieving all the results that you have just told me about?

Nikolai Podguzov: I believe that the most important factor is ensuring Russian Post’s efficiency through enhancing the company’s economic yield. This can be done.

This is evidenced by our systematic work with costs. The business component of Russian Post will develop confidently and successfully.

At the same time, other important factors include the social function and the post’s presence in remote and hard-to-reach areas. It is very important, because sometimes, Russian Post serves as a sort of a centre of gravity, and there, the quality of services we offer to citizens depends, among other things, on the quality of our work.

Take, for instance, the switch over to digital broadcasting that is now underway. The Russian Post is committed to providing citizens in rural and remote areas with set-top boxes sold at the lowest possible price. We are now carrying this work out together with the Government, and we will do it well.

Vladimir Putin: A question concerning Pochta Bank.

We both know and you know this all too well that Pochta Bank does indeed have great prospects for development.

Nikolai Podguzov: Indeed, Pochta Bank really is a very successful project. Financial services are in great demand, especially in rural areas.

We are now rapidly establishing a network of branches of the bank and can clearly see how positive the population’s feedback of Russian Post’s financial services is.

Vladimir Putin: Right now, it is very important as other large financial institutions are closing their branches down for different reasons.

It is, of course, one more important function – not only economic or financial, but also of a social–nature that Pochta Bank can undertake, bearing in mind that the network of post offices extends throughout the whole country.

Nikolai Podguzov: Without a doubt.

Our entire infrastructure, a total of 42,000 post offices, will be offering financial and other important social services that can be of use to the citizens.

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